Trump Drops 20% Hormuz Shipping Levy
US President Donald Trump has withdrawn his proposal to impose a 20% levy on cargo passing through the Strait of Hormuz. He said trade and investment agreements with Gulf countries would replace the planned shipping charge.
Trump Withdraws Hormuz Shipping Levy
Trump announced the reversal one day after proposing that vessels using the strategic waterway should pay the United States for protecting commercial shipping.
The president said discussions with Middle Eastern leaders had been productive and that Gulf countries had agreed to pursue substantial trade and investment deals with the US.
Specific countries, investment amounts and timelines were not disclosed. Trump said the agreements would provide greater long-term benefits than collecting a levy from individual vessels.
Gulf Trade Deals Replace 20% Fee
The original proposal would have charged 20% on cargo transported through the Strait of Hormuz. Trump had argued that the United States deserved reimbursement for maintaining security in the waterway.
The plan raised questions over how the fee would be collected, which vessels would be affected and whether the US possessed the legal authority to impose such charges.
International shipping representatives also raised concerns that the levy could increase transport costs and further disrupt maritime traffic during the ongoing conflict.
Iran Shipping Blockade Remains
Trump said most international vessels would continue to pass through the strait without paying the proposed charge. However, restrictions targeting vessels connected to Iranian ports or cargo would remain in place.
The Strait of Hormuz is a vital route for global oil and gas shipments. Military attacks and uncertainty surrounding access to the waterway have contributed to volatile energy prices and concerns about international supply chains.
